Buying versus leasing a car - What's right for you?

Thanks to Kathleen - Credit Specialist

When you're getting a new vehicle, you've got lots of decisions to make. Compact or Sedan? Standard or Automatic? Are heated seats really worth the extra money? And then comes probably the biggest decision of all - are you going to lease or buy?

While many people have opinions on this topic, there really is no right answer. Both options have benefits that appeal differently to different people. To know what works best for you, you just have to figure out how you will use your vehicle and look at how each option stands up to your needs.

When you lease, you make monthly payments in exchange for the exclusive use and possession of a vehicle instead of actually buying one. So this is a great option if you want to drive a new vehicle every few years.

However, it is very important that you become aware of the conditions that come with leasing. For example, there is often a maximum number of kilometres you can drive in a year, the vehicle must be regularly serviced according to the terms and conditions of the lease and there are penalties if you break the lease before the end of the term.

When you buy a vehicle, you usually get financing from a bank, so you're still making monthly payments. Car loans range from 1 to 7 years so that monthly amount can really vary to fit your budget.

You also have the flexibility to pay it off faster. And once your loan is paid, you'll have a fully-owned vehicle. The best part is, those monthly payments will stop, freeing up cash for other things.

The decision really comes down to how you'll use your vehicle and what you can afford. Will you want to upgrade every few years, or will you have your vehicle for 5 years or longer?

How much will you be driving it? And finally, for the vehicle you're looking at, how do the lease payments and potential surrender charges compare to a monthly loan payment?

Once you know what you want - and need - out of your vehicle, deciding whether to lease or buy is easier. Then, you can move on to your next decision. Like, do you go for metallic black or classic white...? Or maybe fire engine red is more your style?


Visit the RBC Advice Centre for more information.

Know what you can afford before you start shopping for a car

Thanks to Maria - Credit Specialist

So you're getting a new car. Congratulations! It's one of the most exciting purchases you can make. And whether this is your first car, or your tenth, everyone has different ideas on what you should get. Between the advice from your friends and family, ads in the newspaper, and the research you're doing on your own, choosing what you want to buy can also be overwhelming.

It's also really easy to get caught up in the latest car models, new features and dealership offers. So if you don't want to end up with a car you can't afford, it's important that you keep your feet on the ground and do some up-front planning.

One way to do this is to get pre-qualified for your car loan before you even start looking. Knowing your total loan amount is the best way to keep you from shopping outside of your price range. And, you can stay focused when a salesperson starts proposing cutting-edge options, extra warranties or service packages.

Many car dealers also promote low interest rates as a way to get you in the door. Instead of looking at payments and rates, first - ask how much it costs to purchase the car for cash, because it may be cheaper for you to pay cash and to arrange financing elsewhere. If you're presented with a low lease payment, make sure you're aware of all of the conditions that come along with leasing a vehicle.

Buying a car is an exciting time. So before you set your heart on something, make sure it's within your reach. When you can balance what you want, with what you can afford, you'll avoid either disappointing or over-extending yourself financially. You'll come across as a serious, confident buyer when you step into any dealership.

Visit the RBC Advice Centre for more information

Understand the energy efficient solutions for your home renovation

Thanks to Mark Salerno, Sustainable Housing Expert, CMHC

Now when you're looking at energy efficiency, there's really a sequence that you want to undertake. The first thing really that we recommend is looking at air-tightness, so sealing those cracks and reducing the amount of heat that can escape through the walls and in around the windows. Once you've done that and that's really the low-hanging fruit, then you start to look at other options like adding insulation. There there's a little more expense and you also maybe need to bring in someone who can help you to add that insulation. The attic may be simple but it's more difficult if you're adding it to walls.

Then once you've done that you've really reduced your need for heating and in fact for cooling. Then you can start to look at mechanical system retrofits, like a furnace or a new boiler. But again, only once you've reduced the need for heating, so then if you do replace that furnace, you're getting one that's optimally sized for your home and it's not oversized.

Then once you've done that you can actually start to look at other creative options like tapping into the sun's energy through solar heating or photovoltaic panels. You don't simply put a solar panel in 'cause it's sexy and doing it off to start. But you really do targeted retrofits.

And at the end of the day you'll have a much more intelligent approach to renovating your home and achieving your energy saving objectives.

Visit the RBC Advice Centre for more information.

Debt consolidation may help you regain control of your finances

Thanks to Tara, Branch Manager for this article!

Many of us have debt in a number of different places. There's credit cards, store cards, car loans and lines of credit... And because each one has a different due date, minimum payment, and interest rate, it doesn't take long to feel like your debt is a little beyond your control.

Plus, you might find that while you're always making payments, your debt isn't actually going down. If you're feeling like your level of debt isn't where you want it to be, and you're committed to paying it down, a debt consolidation loan can be a great way to take back the control you're missing.

A debt consolidation loan allows you to combine different debts into one loan. So instead of making multiple payments, you're now just making one. Does this sound easier than what you're doing now? Well, it is.

A consolidation loan lets you easily manage your debt, and you're not just paying interest, you're also paying down the principal - this can put you on the path to eliminate it altogether.

How? Well to start, with your debt being in one place, you can easily keep track of your repayment progress and you're likely to reduce your overall interest costs.

Loan terms usually range from 1 to 5 years, so you can choose what works best for you. It's easy to customize your loan payments and your frequency to monthly or more often, so you can balance your ongoing cash flow needs with your goal of becoming debt free.

It's important to think about a consolidation loan as a replacement for your existing debt. So if you're serious about paying it down, a consolidation loan can be a great way to regain control of your money.

Visit the RBC Advice Centre for more information.